Penny for Your Thoughts? Consumer Trends and the Fog of Uncertainty Persists

This week, we cover the historic end of U.S. penny production resulting from high manufacturing costs and obsolescence. Market updates focused on lingering uncertainty due to delayed economic data from the recent government shutdown, while Federal Reserve policy remains unclear, with rate cuts seen as a toss up ahead of December’s meeting. With holiday shopping well underway, we discuss consumer trends, noting resilience despite crosscurrents like tariffs and inflation, with strong performance from major retailers and signs of a “K-shaped” economy. Overall, our current outlook suggests cautious optimism for 2026, supported by fiscal and monetary tailwinds.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy, Key Wealth,

George Mateyo, Chief Investment Officer, Key Wealth

Rajeev Sharma, Head of Fixed Income, Key Wealth

Bradley Thomas, Managing Director of Equity Research, KeyBanc Capital Markets
 

00:23 –The U.S. Mint has stopped producing pennies after 232 years due to high manufacturing costs, sparking discussion on its economic implications and impact on transactions.

02:03 –The recent and historic 43-day government shutdown has finally ended. We discuss its impact, and the resulting delays in critical economic reports like unemployment claims, CPI, and retail sales, and its role in creating uncertainty across markets.

06:18 – We highlight uncertainty around Federal Reserve policy and changes, potential December rate cuts, the lack of clarity due to missing data, and upcoming leadership turnover, including the president and CEO of the Federal Reserve Bank of Atlanta Raphael Bostic’s planned retirement in February and Fed Chair Jerome Powell’s term as Fed Chair ending in 2026.

11:20 – Special guest Brad Thomas, Managing Director of Equity Research with KeyBanc Capital Markets, joins the podcast this week to discuss consumer resilience amid crosscurrents such as tariffs and inflation, noting strong performance from major retailers, bifurcation between affluent and lower-income consumers, and shifts in spending patterns toward home-related goods.

16:09 –Our experts examine how tariff increases could affect holiday shopping, with potential price pressures in categories like toys, and how retailers are managing these challenges.

19:02 –Rising delinquencies in credit cards and loans are rising concerns for lower-income consumers, while overall outlook remains cautiously optimistic thanks to anticipated fiscal and monetary stimulus supporting spending and investment opportunities. 

 

Additional Resources

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